Which of the Following Statements Is True Concerning Variable Interest

question 43

Multiple Choice

Which of the following statements is true concerning variable interest entities (VIEs) ?
1) The role of the VIE equity investors can be fairly minor.
2) A VIE may be created specifically to benefit its sponsoring firm with low-cost financing.
3) VIE governing agreements often limit activities and decision making.
4) VIEs usually have a well-defined and limited business activity.

• A) 2 and 4.
• B) 2, 3, and 4.
• C) 1, 2, and 4.
• D) 1, 2, and 3.
• E) 1, 2, 3, and 4.

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Definitions:

Revenue Management

The strategic use of pricing, timing, and other variables to maximize income, often used in hotel, airline, and event ticketing industries.

Expected Profit

A forecasted financial gain, derived from projecting future income and deducting anticipated costs.

Sanitary Landfill

A waste disposal site where trash is isolated from the environment until it is safe to be integrated into the natural environment, typically involving lining and management systems to minimize environmental impact.

Differential Pricing

The practice of charging different prices for the same product or service in different markets or to different buyers, based on varying demand and willingness to pay.